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#1 17-12-2018 07:55:43

Admin & Trader
From: Paris - France
Registered: 21-12-2009
Posts: 2534

Brexit: brokers are reducing leverage effect

Brexit: brokers are reducing leverage effect

Brexit has had a genuine impact on brokers this week. A number of companies issued statements early last week, saying that they would make changes to prevent traders from opening new positions and limiting leverage requirements.

A Swiss broker has confirmed that it would limit its leverage to 30:1 for the UK stock index listed on its platform. The broker said the restrictions will only be lifted if it is convinced that Brexit volatility is reduced, and it has also set a leverage ceiling on two crude oil pairs.

This change was also followed last week by a similar change in the margin requirements of Saxo's Japanese subsidiary. The company issued a statement announcing an increase in margin requirements for all major GBP currency pairs, from 2.5% to 4% - in other words, decreasing leverage down from 40:1 to 25: 1.

Saxo noted that the rules would affect existing positions. Traders who are currently trading the GBP will need to ensure that they have the required margin to avoid having their position closed by the broker.

Similar changes were also made last week by FxPro. They announced an increase in margin requirements to 2% for their EU stock indices.
They also mentioned that they reserve the right, if needed, to prevent traders from opening positions following any Brexit announcement. Broader spreads are expected in the coming days.

Other measures, similar to those described above, will likely be taken by other brokers over the next few days hours as they attempt to reduce Brexit's impact.

"Anything worth having is worth going for - all the way." - J.R. Ewing



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